Thermax Limited Just Missed Earnings - But Analysts Have Updated Their Models

Thermax Limited (NSE:THERMAX) just released its latest second-quarter report and things are not looking great. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of ₹25b missed by 12%, and statutory earnings per share of ₹10.62 fell short of forecasts by 29%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Taking into account the latest results, the most recent consensus for Thermax from 20 analysts is for revenues of ₹107.8b in 2026. If met, it would imply a credible 5.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to swell 18% to ₹62.43. Before this earnings report, the analysts had been forecasting revenues of ₹116.2b and earnings per share (EPS) of ₹68.00 in 2026. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

See our latest analysis for Thermax

The analysts made no major changes to their price target of ₹3,615, suggesting the downgrades are not expected to have a long-term impact on Thermax's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Thermax analyst has a price target of ₹5,100 per share, while the most pessimistic values it at ₹2,400. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Thermax's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this to the 231 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. So it's pretty clear that, while Thermax's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Thermax. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Thermax going out to 2028, and you can see them free on our platform here..

Even so, be aware that Thermax is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.